Rwanda's Export Growth Fund — Subsidised SME Credit Line Evaluated Against a Matched Comparison Group

Since 2016, Germany's KfW development bank has channelled EUR 8.5 million, and later a further EUR 14 million, through the Development Bank of Rwanda (BRD) on behalf of Germany's Federal Ministry for Economic Cooperation and Development (BMZ). BRD on-lends the funds to participating commercial banks, which issue long-term loans to small and medium enterprises — mainly export-oriented agri-processors in tea, coffee, fruit, mushrooms, cut flowers, horticulture and potatoes — at 10–12% interest, well below Rwanda's typical 17–19% market rate.
As of the most recent published figures, 85 companies had been supported and roughly EUR 26 million in loans committed, with repaid funds recycled into new loans.
A companion programme, the Export Growth Fund (EGF), offers similarly subsidised finance to exporters and potential exporters. The International Growth Centre (IGC) evaluated it using a matching design that compared EGF recipients with similar non-recipient firms using loan and tax administrative data. Recipient firms showed approximately 50% higher revenue growth, roughly 30% higher growth in permanent employment, and were about 10 percentage points more likely to export than the matched comparison group. Two years after receiving a loan, recipients' Corporate Income Tax payments rose 80–100% and PAYE payments rose 30–40% relative to before, which the researchers estimate could make the facility cost-neutral for the government within five years through higher tax receipts.
The Rwandan government, BRD and KfW have since signed a further Frw 20 billion grant agreement to establish a complementary Export Credit Guarantee Facility explicitly targeting growing and export-oriented SMEs, including women-led companies.
Caution: the IGC study describes itself as a preliminary, matching-based (not randomised) evaluation, with an RCT-based follow-up still planned. A related, differently structured Rwandan SME credit-guarantee vehicle (the Business Development Fund) was publicly criticised in 2020 for directing over Frw25 billion toward large-enterprise projects rather than the SMEs it was meant for, and was folded into BRD in mid-2025 — a reminder that governance and targeting discipline, not just funding volume, determine whether this family of instruments reaches the intended SMEs.

Read the full analysis: https://www.kfw-entwicklungsbank.de/SDG-portal/SDG-8/SME-support-Rwanda/